A rash of coronavirus outbreaks in meat processing plants have caused a meat shortage in the U.S. Though President Donald Trump invoked the Defense Production Act last month to keep meat processing facilities open, Smithfield Foods and other companies have recently been forced to temporarily shutter plants to keep workers safe.
Meat-alternative companies are stepping in to help fill the needs of consumers and grocery stores. Manufacturers of products like Tofurky and companies like Beyond Meat Inc. are ramping up production and offering discounts on their products.
Grocery stores are stocking up on replacement meat products to fill the void left by the meat shortage. Kroger, for example, began rolling out Impossible Foods’ products in 1,700 stores during the first week of May, and plans to have them in 20,000 stores by the end of the year — more than what had been planned before the coronavirus hit.
What does this mean for consumers?
Alternative meat options could be more attractive to consumers over the coming months as traditional meat products become not only more scarce, but also more expensive. Some chains, like Kroger Co. and Costco Wholesale Corp. are implementing purchase limits on meat, which is another reason why people may turn to alternative meats.
Heading into Memorial Day Weekend, typically the kickoff for the summer grilling season, more Americans than ever are buying plant-based burgers and hotdogs. Tofurky, the meat-free classic, has reported a sales increase of 40% in the past three months. Before the Butcher, which sells burger and sausage alternatives, has also seen sales skyrocket.
Overall, sales of plant-based meat have leapt by 264% over the nine-week period ending May 2. That translates to a $25.7 million increase in revenue. Sales of traditional meat were also up during that period, as people cooked at home instead of going to restaurants, but they only rose by 45%.
Wall Street responds to the rise of alternative meats
Though alternative meat sales are rising, traditional meat still accounts for about 99% of the total volume of meat sales in the U.S. The beef lobby has been working to keep it that way, assuring consumers that the industry is doing everything possible to keep up with demand, and that shortages will only be temporary.
Still, investors are noticing the rising demand for alternative meats. Beyond Meat has seen its stock increase by 90% so far this year as it moves into more grocery stores and partners with Starbucks Inc. in Canada and China. It is also in talks with McDonald’s Corp. about appearing on the fast food superpower’s menu. Beyond Meat has also made big moves on Wall Street recently, with Argus upgrading its price target to an all-time high of $180. Beyond’s Q1 revenue was $97.1 million — up 141% from the same period last year.
When meat production goes back to normal, it is possible that demand for alternative meat will still remain high if people try it and like it during this unusual period.
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